Offshore cash provided the best return for South African investors during October. Markets were pared back in October amid the escalating conflict in the Middle East, the approach of the US election, and strong jobs data tempering hopes for big interest rate cuts. Markets hit a rocky patch in October as investors became more concerned about longer-term inflation picking up again.

Ever since the US Federal Reserve’s jumbo 0.5% rate cut in mid-September markets have become anxious about the longer-term consequences of falling rates and renewed economic strength. Cutting by too much too soon risks stoking the inflationary embers further out. What’s more, with a second Trump presidency growing more likely as the election edged nearer, and his spending plans having an uncertain effect on prices, markets have grown more wary of a Fed policy ‘mistake’. The effects were mixed for shares as the US economy still looks in decent shape. Utilities and other interest-rate-sensitive areas were underperformers. For bonds, the jump in yields abruptly ended the steady upward trajectory in prices over the summer.

Local bonds also jumped during October, resulting in a decline of 2.2% for the local Bond market. Local equities were also under pressure, with platinum mining companies the only bright spot on the JSE. The Rand lost ground against the greenback closing the month at 17.61 to the Dollar, after starting the month at 17.25.